UOB prevails in its appeal against Lippo in the furniture rebate case; Lippo is accused of 'distorting' the property market

Oct 31, 2022

In a dispute over "furniture rebates" granted to property buyers by developer Lippo Marina Collection (LMC), UOB has won an appeal.

In a judgement dated October 28, the Singapore High Court's appellate division allowed UOB's claim against LMC in the tort of unlawful means conspiracy, but not in the tort of deceit.

LMC must pay UOB damages, the amount of which will be determined during the assessment of damages. UOB was also awarded S$59,000 in costs and disbursements for the appeal.

In November 2014, UOB filed a lawsuit alleging that LMC, a subsidiary of Indonesia's Lippo Group, conspired with two property agents to offer "excessive" furniture rebates to buyers, inflating the stated sale prices of units at the Marina Collection, a luxury condo in Sentosa Cove.

The bank claims it was duped into making loans based on inflated sale prices.

For example, a unit with a stated purchase price of S$6.1 million was sold with a S$1.4 million furniture rebate. The actual purchase price was S$4.8 million.

The bank provided the property buyer with a loan of S$4.9 million, or 80% of the stated purchase price. However, the loan amount was greater than the property's actual purchase price. The rebates in some cases reached 34.5 percent of the stated purchase prices.

The appellate division's judges observed that LMC did not appear to "fully appreciate the gravity of its conduct."

The size of the rebates indicates that they were not genuine, and LMC had also paid sales commissions based on the actual purchase price rather than the stated purchase price.

Nonetheless, LMC issued documentation with inflated purchase prices, arming purchasers with the "instrument to deceive UOB."

Furthermore, LMC's inflated stated purchase prices would have served as the standard for valuing other units within the property.

"Not only did it deceive UOB, but other appraisers and purchasers would rely on the purchase price in the option to purchase to value other units in Marina Collection that have been purchased or in comparable projects," said Justice Woo Bih Li, who delivered the verdict.

"The purchase price painted a distorted picture of a property market segment."